Andrew DiFeo Headshot A Velocity Dealer’s Perspective: Find The Good In Bad Dealership ReviewsOne of the up-and-coming velocity dealers I’ve admired is Andrew DiFeo, Hyundai of St. Augustine, Fla.

I’m not the only one who considers DiFeo a bright bulb among dealers, as evidenced by a Q&A in last week’s Automotive News. The piece discusses his approach to customer and online reputation management.

I’ll save DiFeo’s insights for your own review, but his pragmatic take on the positive aspects of negative dealership reviews warrants repeating here:

“We need bad reviews. It’s an odd thing, but it adds credibility. We have more than 1,100 reviews on DealerRater.com, and maybe 11 or 12 are negative. If they were all positive, people probably wouldn’t believe them.

We also look at negative reviews as a positive. If we have a process in place for something, it’s not going to be followed 100 percent of the time. Reviews and customer satisfaction surveys from the manufacturer can help diagnose the problem and help us fix it. As a managing partner of the business, I feel like it’s important to have someone with ownership in the business handle the reviews, especially the negative ones, right away.

A lot of times we look at it as a training tool to find out what customers like about our business — and make sure we keep doing that — and don’t like about our business to make sure we don’t do that in the future. We also look at other dealers’ reviews because you see what customers like about their experiences elsewhere and what they don’t like.”

DiFeo’s perspective reminds me of the still-relevant lyrics Johnny Mercer wrote in the tune, “Accentuate the Positive,” nearly 70 years ago:

“You’ve got to accentuate the positive

Eliminate the negative

And latch onto the affirmative

Don’t mess with Mr. In-Between.”

 

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I received the below question from a Velocity dealer.  My answer follows.

Dale,

Random question but one of my used car managers takes 1, 2, 3+ days to make decisions on work that needs to be done in the ServiceBay 300x199 How Long Should It Take To Make Reconditioning Decisions?shop. We end up checking out vehicles, waiting for a decision, and then doing the work. Sure, sometimes the Used Car Dept. wants a better price or cheaper/different parts, but we may check out 10 cars in a row and put them all outside waiting for decisions. Is it reasonable for a decision to be made when the vehicle is up on the lift or, at the very least, within the day?

We follow the progress of our used cars with a spreadsheet that my service manager sends out 2-4 times/day updating all departments where we are.

C:

Wonderful question, and the answer is, yes, yes, yes. You must find a way to make these final reconditioning decisions faster. I know exactly the condition of which you speak. Where cars go up on the rack, come down, go outside, wait for manager approval, back up on the rack, etc., etc., etc. This is absolutely wasted time that you can no longer afford. Devise a way to get the decisions made while the vehicle is still in the air and get on with the next one. As usual, you’ve put your finger on a key Velocity issue.  Good work.

 

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This week’s Automotive News offers a story about dealers shutting down their business development centers (BDCs).

To me, the development seems like a step in the wrong direction for three key reasons.

EllisBrooks 300x244 Dump Your BDC? 3 Reasons Why It’s A Bad IdeaFirst, whether dealers recognize it or not, our business is increasingly moving toward a more e-centric model, where an even greater share of vehicle shopping and sales transactions will occur outside the physical walls of the dealership. We see evidence of this emerging trend in the studies of Gen Y buyers, who effectively say they would avoid dealerships altogether if they could.

In this environment, it would seem that dealers need a group of people with the aptitude and skills to sit in front of a computer all day and manage customer requests that occur across a widening variety of mediums (e.g., e-mail, live chat, phone and text messages).

The story notes how some dealers are shifting these BDC responsibilities to their sales teams. For me, this raises a yellow flag—I’m concerned that the sales teams at most dealerships lack the ability, interest and temerity (the DNA, really) to execute these tasks as efficiently as a competent BDC team.

Second, as I’ve noted here in the past, today’s retail car business, like most retail business sectors, suffers from margin compression. This situation makes it essential that dealers conduct more business at a lower cost per transaction to achieve sustained profitability and prosperity. By their nature, BDCs fit this business need—BDC staffers typically earn less than highly commissioned sales people and, as noted above, often possess the right mix of aptitude and technical skills to meet the needs of today’s (and tomorrow’s) customers.

Third, the frustrations many dealers feel toward their BDCs is symptomatic of a currently unavoidable duality—at some point, customers still need to come to the dealership and buy cars, which often creates conflict between the BDC and sales department. Such dynamics strike me as a management challenge, rather than a rationale to do away with the BDC altogether.

Dealers who regard their BDCs as successful see them as a technology-enabled, two-way collaborative hub that catches, distills and distributes incoming business to the appropriate people and processes. The dealers also consider BDCs an invaluable resource to track their dealership’s performance with prospects and customers, and address any efficiency- and profit-draining breakdowns.

These dealers are investing, not divesting, resources in their BDCs to continually meet the needs of their customers and their respective bottom lines. If I were a dealer today, I’d be doing the same thing.

 

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Turnaround Specialist: A Dealer Shares 5 Secrets Behind His Used Vehicle Success

05.24.2013

“We’re making more net profit in a month now than we used to make in an entire year. That speaks to two things…how bad we were before and how good we are now.” This quote comes from Paul Lynch, the general sales manager at DePaula Chevrolet, Albany, N.Y., who has led an impressive turnaround in [...]

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A Look At The Inventory Acquisition Specialist Position

05.24.2013

As car dealers realize they need to expand their “net” to acquire cars, many recognize the typical used vehicle manager isn’t fully up to the task. I’m not talking about the manager’s ability or skill, although that can often be an impediment as online sources play a larger role in a used vehicle department’s acquisition. [...]

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Imagining the industry’s future

05.01.2013

The road to 2033 How might carmaking look 20 years from now? (The following is a reprint from The Economist, 4/30/2013) THE PAST TWO decades have been an exciting time for the motor industry, but not always in a good way. The battle to achieve scale to survive in a global market produced victims as [...]

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Velocity Dealer Bill Simmons Shares Process To Eliminate Investment “Down Time”

04.26.2013

  Some dealers might think Bill Simmons, GM of Haley Toyota Certified, Richmond, Va., is getting ahead of himself with his used vehicles. The reason: Simmons doesn’t wait until cars arrive at his dealership from the auction to get them online. Most Friday nights, he’s working past 11 to cull photos and create descriptions for [...]

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A New Paradigm For Satisfaction: Mobile Tools, Price-Empowered Sales Teams

04.23.2013

I found myself connecting the dots while reading two articles in this week’s Automotive News. The first article highlighted Nielson/Cars.com stats that show 83 percent of new-car shoppers have smartphones and, of the group, 43 percent actively use them at dealerships as they check out inventory. The piece also noted how dealers embrace this trend, [...]

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3 Best Practices To Manage Used Vehicles As Investments

04.15.2013

  I’ve long advocated that dealers manage their used vehicles as investments—that their No. 1 goal should be to maximize their return on investment (ROI) within the shortest amount of time and the least amount of risk. This investment-driven retailing strategy is harder for some dealers to accept (and in some cases, acknowledge) than others. [...]

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How Velocity Influences A Dealership’s Bottom Line

04.12.2013

As I discuss in my latest book, Velocity Overdrive: The Road to Reinvention, the successful adoption of the Velocity Method of Management™ in a dealership requires a champion. This individual, who is often a dealer principal or a key manager, serves as the steward of the people and processes that execute the Velocity strategy. But [...]

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